State aid: Commission approves aid for modernisation of Slovak shipyard Komárno
European Commission - IP/07/390 22/03/2007
Brussels, 22nd March 2007
The European Commission has decided under EC Treaty state aid rules that investment aid of about €500 000 to the Slovak shipyard 'Slovenské lodenice Komárno' is compatible with the Single Market. The investment project will modernise the yard and create jobs in a disadvantaged region in the South of Slovakia without unduly distorting competition.
Competition Commissioner Neelie Kroes commented: “The investment project will enhance the competitiveness of this yard. It complies with the stringent conditions applicable to investment aid in the shipbuilding sector."
'Slovenské lodenice Komárno' is a large company with shipyards situated on the Danube river in a region in the south of Slovakia, eligible for state aid for regional development. The company produces small-sized sea going container ships and bulk carriers. The investment project of about €2 million will enable the yard to optimise its layout and to make the production process less dependent on water-levels on the Danube. Slovakia notified its intention to support the project with €500000.
Because of the sensitivity of the shipbuilding sector, with recurring periods of over-capacity, state aid to shipbuilding in the EU is governed by a special set of rules, the Framework on state aid to shipbuilding (see IP/03/1607 and IP/06/1452). This framework is more restrictive than the general rules on regional investment aid as it allows aid only for investments for upgrading and modernisation of existing yards to improve the productivity of existing installations.
After its investigation, the Commission is satisfied that every part of the investment project constitutes a genuine modernisation of the yard with the objective of increasing the productivity of its installations. As the investment results in the reduction of the hull assembly time, it will also lead to a capacity increase. This increase, however, merely stems from significant productivity gains and is therefore not contrary to the objectives of the Framework. The Commission therefore found the investment aid compatible with the EU state aid rules as it was unlikely to distort competition unduly within the Single Market.